Breach of a Non-Disparagement Clause After Employment Discrimination Claim Settles

In October 2019, after serving for two years as Vice President of Program and Community at the Eugene and Agnes E. Meyer Foundation, Dr. Terri Wright was fired by the Foundation’s CEO, Nicola Goren (Ms. Goren).   Dr. Wright, who is Black, claimed that the reasons given for her termination were pretextual and that the real grounds were discriminatory animus.  The parties entered into a settlement agreement with a mutual non-disparagement clause.    About a month later, Ms. Goren told a colleague that Dr. Wright was  “toxic” and that two-thirds of the Foundation staff would have quit if Wright had not been terminated.  

Dr. Wright sued both the Foundation and Ms. Goren, alleging breach of the severance agreement, discrimination in violation of 42 U.S.C. § 1981, and defamation.  The district court dismissed all three actions, but in Wright v. Eugene and Agnes E. Meyer Foundation, the D.C. Circuit reinstated all three claims.

The district court dismissed the breach of contract claim on the ground that the non-disparagement clause in the severance agreement only bound the Foundation to direct its employees not to disparage Dr. Wright.  If an employee nonetheless did so, even if that employee was the CEO acting on behalf of the Foundation, that conduct did not create a breach.  The D.C. Circuit majority concluded that the provision in question was ambiguous and susceptible to Dr. Wright’s reading, which would make the provision an effective prohibition on disparagement by either the Foundation or its agents.  In response to a dissenting opinion, which adopted the district court’s reading, the majority gently suggested that its own reading was not only permissible but likely and that the contrary reading could only be arrived at by ignoring canons of construction as well as common sense.  

The district court dismissed Dr. Wright’s § 1981 action because it could not be maintained once her breach of contract claim was dismissed.   The D.C. Circuit looked at the claim more carefully.  A § 1981 claimant must establish: membership in a protected class, an adverse employment action, and an inference of that the latter was a product of discrimination.  The first two are not contested.  Dr. Wright sufficiently alleged discriminatory intent for the purpose of surviving a motion to dismiss by alleging that she had had positive performance evaluations that were quite specific in listing Dr. Wright’s accomplishments, while she was terminated without notice or warning based on “vague and subjective” criticisms.

The D.C. Circuit upheld the dismissal of the first two claims against Ms. Goren, who was not a party to Dr. Wright’s severance agreement.  Dr. Wright’s defamation claim was brought only against Ms. Goren.  That’s a tort claim, so you can read about in some other blog.  It survived.  That suffices for us.

Judge Justin Walker (left), writing in dissent, argued that the severance agreement required the Foundation to direct its employees not to disparage Dr. Wright.  As Dr. Wright did not allege that Foundation failed in that duty, she has no claim.  If she wanted to impose a greater obligation on the Foundation, she should have negotiated for different language.  However, the dissent contends that the Foundation would have difficulty policing the on and off-duty statements of its employees. 

In defense of his claim that the severance argument is unambiguous, Judge Walker spends an unseemly amount of space addressing the patent ambiguities of the provision.  It is a mutual non-disparagement provision.  After laying out Dr. Wright’s obligations under the provision, the provision provides that the Foundation “likewise” will not disparage Dr. Wright.  But “likewise,” Judge Walker informs us “often does not mean ‘identically.'”  Bravo.  Does it sometimes mean “identically”?  If so, why we’ve got ourselves some ambiguity, don’t we?  He cites a dictionary.  My Google search turns up a definition that says it means “in the same way.”  First hit.  Oxford Dictionary.  Boom!  Ambiguity.

Judge Walker also finds that Dr. Wright did not sufficiently allege that her firing was motivated by racial animus.  Thus, even if she could state a breach of contract claim, he would reject her §1981 claim.  And he rejects the torts claim for torty reasons that we need not concern ourselves with here.

I have been able to find no subsequent history on the case, and the Internet is silent on the matter.  I note that Ms. Goren has moved on.  Perhaps the parties reached a settlement.  The Meyer Foundation, committed to supporting organizations that work “to achieve a racially and economically just Greater Washington” likely does not benefit from continued litigation.